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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
During the past 13 years, the highest Beneish M-Score of EMCOR Group, Inc. was -1.01. The lowest was -3.12. And the median was -2.47.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of EMCOR Group, Inc. for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 1.0667||+||0.528 * 0.9675||+||0.404 * 0.9718||+||0.892 * 1.0196||+||0.115 * 0.9879|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0654||+||4.679 * -0.0099||-||0.327 * 1.043|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $1,309 Mil.|
Revenue was 1652.585 + 1589.187 + 1714.796 + 1566.711 = $6,523 Mil.
Gross Profit was 239.527 + 216.929 + 248.573 + 222.229 = $927 Mil.
Total Current Assets was $1,938 Mil.
Total Assets was $3,418 Mil.
Property, Plant and Equipment(Net PPE) was $119 Mil.
Depreciation, Depletion and Amortization(DDA) was $74 Mil.
Selling, General & Admin. Expense(SGA) was $655 Mil.
Total Current Liabilities was $1,274 Mil.
Long-Term Debt was $308 Mil.
Net Income was 46.849 + 32.849 + 42.466 + 45.024 = $167 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 11.755 + -17.821 + 137.663 + 69.354 = $201 Mil.
|Accounts Receivable was $1,204 Mil.
Revenue was 1552.918 + 1590.539 + 1649.279 + 1605.315 = $6,398 Mil.
Gross Profit was 220.241 + 216.203 + 236.871 + 206.562 = $880 Mil.
Total Current Assets was $1,888 Mil.
Total Assets was $3,405 Mil.
Property, Plant and Equipment(Net PPE) was $121 Mil.
Depreciation, Depletion and Amortization(DDA) was $75 Mil.
Selling, General & Admin. Expense(SGA) was $603 Mil.
Total Current Liabilities was $1,185 Mil.
Long-Term Debt was $326 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1309.095 / 6523.279)||/||(1203.666 / 6398.051)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(216.929 / 6398.051)||/||(239.527 / 6523.279)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1937.734 + 118.529) / 3417.786)||/||(1 - (1887.833 + 121.376) / 3404.895)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(74.717 / (74.717 + 121.376))||/||(74.422 / (74.422 + 118.529))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(655.2 / 6523.279)||/||(603.147 / 6398.051)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((307.523 + 1273.965) / 3417.786)||/||((326.084 + 1184.539) / 3404.895)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(167.188 - 0||-||200.951)||/||3417.786|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
EMCOR Group, Inc. has a M-score of -2.50 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
EMCOR Group, Inc. Annual Data
EMCOR Group, Inc. Quarterly Data